03/08/2026
𝗧𝘄𝗼 𝗱𝗶𝗮𝗹𝘀, 𝗽𝗼𝗶𝗻𝘁𝗶𝗻𝗴 𝗶𝗻 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝘁 𝗱𝗶𝗿𝗲𝗰𝘁𝗶𝗼𝗻𝘀
In our last update, markets had shifted from expecting two rate cuts this year to expecting a hold. Three members of the Bank of England's rate-setting committee have now gone a step further. On 30 July they voted to raise the base rate to 4%. They were outvoted six to three, so the Bank Rate stays at 3.75%, but a third of the committee wanting rates higher is worth noticing.
That sits oddly against the inflation numbers, which are genuinely good. CPI fell to 2.6% in the year to June, down from 2.8%, and the lowest reading since March 2025. Cheaper fuel at the pumps did most of the work. Both things are true because they measure different things. Inflation tells you where we have been. The committee is looking at where the Middle East energy shock takes us over the next twelve months.
For mortgage pricing, the second dial is the one that counts. Fixed rates follow swap rates rather than the base rate. A swap is simply what it costs a lender to borrow money at a fixed price for a set number of years, which means swaps move on what the market expects rates to do next, not on what they are today.
Swap rates fell in the first couple of months of the year, then shot up on the back of Middle-Eastern tensions at the beginning of March, then we had a ceasefire – and that is what gave us a limited run of fixed rate reductions. Since then, the picture has taken a turn for the worse again, with Oil Prices going back up and uncertainty back on the table, Swap Rates and Mortgage Rates have been back on the rise again.
Where they go from here depends largely on oil. If tensions ease, swaps should settle and competition between lenders picks up again. If they do not, expect continued upward pressure on fixed pricing. Both are genuinely possible.
The encouraging part is that appetite has not gone anywhere. Product choice rose for a third straight month to over 7,100 deals, and with average standard variable rates at 7.13%, the gap between a fixed deal and a revert rate remains wide. Lenders want to lend. Next decision is 17 September.
𝗔 𝗻𝗲𝘄 𝗣𝗿𝗶𝗺𝗲 𝗠𝗶𝗻𝗶𝘀𝘁𝗲𝗿, 𝗮𝗻𝗱 𝘄𝗵𝗮𝘁 𝗵𝗲 𝗵𝗮𝘀 𝗿𝘂𝗹𝗲𝗱 𝗼𝘂𝘁
Andy Burnham took office on 20 July. The useful question is not what he might eventually do, but what is now off the table.
Two things are, and both matter to us. Stamp duty will not change at the Autumn Budget, confirmed directly in response to weekend reports suggesting otherwise. And rent controls have been ruled out for England, with Angela Rayner returning as Housing Secretary.
Ruling things out has real value. Last autumn, months of speculation about stamp duty and capital gains reform did measurable damage to activity while everyone waited for an answer. Closing those questions down early takes a source of hesitation out of the market.
Also confirmed: VAT on domestic electricity drops from 5% to zero for six months from 1 October, worth around £45 a year to a typical household.
Still open: longer-term property tax reform remains an idea rather than a policy, with no timetable or legislation attached. Two changes are already on the statute book though, and worth diarising – the tax rate on property income rises in April 2027, and a surcharge on homes valued over £2 million starts in April 2028. Neither is new, and neither came from the current administration.
𝗔 𝗾𝘂𝗶𝗲𝘁 𝗺𝗼𝗻𝘁𝗵, 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗻𝘂𝗺𝗯𝗲𝗿 𝗲𝘃𝗲𝗿𝘆 𝘀𝗲𝗹𝗹𝗲𝗿 𝘀𝗵𝗼𝘂𝗹𝗱 𝘀𝗲𝗲
Nationwide put annual house price growth at 1.8% in July, down from 2.2%, with the average property at £277,542. Rightmove, which tracks asking prices rather than sale prices, recorded a 1% fall to £372,359. That is a bigger drop than the 0.2% that is normal for July.
Given the month it was, none of that is surprising. Supply is close to a twelve-year high, so buyers have plenty to look at. Sales agreed across the first half were 6% down on last year but level with 2024, and mortgage approvals ticked up in June. Slower, not stalling.
Of all homes sold so far this year, 74% never needed a price reduction. The quarter that did, spent an average of 127 days on the market. The ones priced right from day one sold in 36.
That is three months of difference, entirely within the seller's control at the point of instruction. With this much choice around, an ambitious price does not sell slowly for more. It usually makes the house next door look like the obvious buy, then sells later for less than it would have achieved at the start. And since roughly four in five sellers are also buyers, the number that really matters is the gap between selling and buying, not the headline on the board.
𝗧𝗵𝗲 𝗴𝗼𝗼𝗱 𝗻𝗲𝘄𝘀: 𝘁𝗵𝗲 𝗱𝗼𝗼𝗿 𝗶𝘀 𝗼𝗽𝗲𝗻𝗶𝗻𝗴 𝘄𝗶𝗱𝗲𝗿
On 28 July the FCA's consultation on mortgage access closed. It is the most significant piece of work on this in over a decade, and it is aimed squarely at the people the current rules keep out. The self-employed. Contractors. Anyone whose income does not arrive in twelve equal instalments. Older borrowers. People who had a rough few years and have since put things right.
Responsible lending requirements stay in place. What changes is the recognition that "affordable" has been measured in a way that suits some people's finances rather better than others.
The regulator's evidence for why it can afford to do this is striking: around 99% of mortgages taken out since 2014 are not in arrears. That is through a pandemic, an inflation shock and the sharpest rate rises in a generation. The market built something genuinely resilient, and that resilience is now buying room to widen access. Final rules are expected in the second half of this year.
𝗚𝗼𝘁 𝗮𝗻𝘆 𝗺𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀? 𝗚𝗲𝘁 𝗶𝗻 𝘁𝗼𝘂𝗰𝗵! 🏡
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